Horton Business Group

Experts at Buying and Selling
Businesses

What buyers are
looking for

Knowing what buyer’s are looking for is critical to selling
your business. It is like running your business, by
understanding your customers and your product or service to
meet their needs you have succeeded in business. The same
holds true for selling your company.

First of all, remember that you are selling your business.
Your buyer is looking to buy your business. They are not
buying you. In this regard, you must communicate the
perception that the business can be run without you. If this
is not the case then you must offer solutions on how it can.
This is one of the most important sales principles in
selling your business. Buyers are looking to buy businesses
that don’t depend on the owner.

As a corollary to this, buyer’s want businesses that are
fully staffed and managed without the owner or minimal owner
participation. In addition, buyer's want an owner is willing
to transition stay and help the buyer learn the business.
You must be willing to stay on for a sufficient period of
time for this to transpire.

Be flexible on deal structure, at the same time be creative
and open minded. Many sellers begin my demanding a cash
deal. While this may happen, the statistics show that most
transactions are more complex than a simple cash deal.

Buyers want a company with a good cash flow. Many times
companies have this but because of the accounting, it is not
obvious. It is important to demonstrate through good
accounting how much profit the company makes. Many times due
to tax avoidance, the accounting does not reflect true
profits received by the owner.

Your company must contain capacity for growth. The buyer
must perceive the ability to grow the business.
Typically, this is one of the main reasons the buyer is
pursuing acquisition of a selected company.

The owner must communicate a good reason for selling.
Reasons such as retirement and health are common. Many
owners sell because they are ready to do something else.
Whatever, reason the buyer must be given the confidence that
this is a successful business that can be grown.

It is important that the buyer believes the company is a
manageable risk opportunity. Every business contains some
level of business and financial risk. The key is that this
risk must be manageable and something the buyer can live
with.

The buyer must perceive that the business is systemized,
that the success of the company is due to the owner creating
a system for dealing with customers, managing the employees
and their products. A systematic process insures that
success is repeatable each day and when the owner leaves the
business, the capability for success has not walked out the
door.